The Philippines Sets Sights on EU Free Trade Agreement to Diversify Economic Partnerships - thediplomaticaffairs.com

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Geneva, Switzerland

Asia Europe March 4, 2024

The Philippines Sets Sights on EU Free Trade Agreement to Diversify Economic Partnerships

Photo: Reuters

In a significant move to diversify its economic partnerships and bolster resilience, the Philippines has expressed its eagerness to commence negotiations for a free trade agreement (FTA) with the European Union (EU). The Philippine Foreign Minister announced on Monday the country’s intention to initiate these talks “very soon,” highlighting a strategic pivot away from its heavy commercial reliance on China. This announcement comes after months of preliminary discussions and represents a critical step towards strengthening the country’s economic framework. The Southeast Asian nation has long been engaged in trade predominantly with China, a relationship that has been both beneficial and challenging due to geopolitical tensions and economic dependencies. In a bid to create a more robust economic foundation, the Philippines is now looking to tap into the vast market opportunities presented by the EU. The move could potentially open doors for increased investment, trade diversification, and economic growth. The Philippines’ previous attempt to secure a trade deal with the EU roughly a decade ago was thwarted by human rights concerns amidst the controversial war on drugs under the administration of former President Rodrigo Duterte (2016-2022). The policies enacted during Duterte’s term received widespread criticism both domestically and internationally, causing significant hurdles in foreign relations, particularly with Western nations.

The current Philippine administration, under a new leadership, is keen on reversing past setbacks and projecting an image of a country ready for change and economic reform. By pursuing a free trade agreement with the EU, the Philippines hopes not only to expand its trade portfolio but also to enhance its economic resilience. The Foreign Minister explained that fostering stronger partnerships with other countries became essential to help the Philippine economy better withstand external shocks and internal vulnerabilities. The EU, for its part, represents a strategic partner with its sophisticated market, strong investment capabilities, and commitment to promoting sustainable development and human rights. An FTA with the EU would not only mean increased access to goods, services, and investments but also an alignment with higher standards of labor, environmental protection, and corporate governance.

An FTA with the EU could bring a multitude of benefits to the Philippines. It has the potential to create jobs, stimulate innovation, and enhance competitiveness. Filipino industries such as agriculture, textiles, and electronics could gain from reduced tariffs and better market access. Furthermore, the partnership could lead to technology transfers and skills development, contributing to the country’s long-term economic growth and development goals. However, the path to an agreement is not without challenges. The Philippines will need to address the EU’s concerns regarding human rights and adhere to the strict regulatory standards that the EU imposes on its trade partners. Additionally, the country must prepare its industries to compete in the demanding EU market, which requires high-quality products and adherence to stringent rules and regulations.

The pursuit of an FTA with the EU is indicative of the Philippines’ broader strategy to diversify its trade partners and reduce economic reliance on any single country. This aligns with the nation’s geopolitical interests, providing greater leverage and flexibility in its foreign policy and international relations. Moreover, strengthening ties with the EU can also have significant political implications, as it signals the Philippines’ commitment to international norms and values such as democracy, human rights, and rule of law. This could pave the way for more robust engagement with other Western nations and international bodies, further integrating the Philippines into the global community.

By Roberto Casseli

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